Tax gap by country 57 5. 2: Avoidance tax gap by type of tax, 2018 to 2019 to 2022 to 2023 (£ billion) Notes for Figure 7. As the OECD At 46. The following charts take a look across countries using similar data from another source. According to World Bank, "GDP at purchaser's prices is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products. The RA-GAP methodology for estimating the VAT gap presented in this Technical Note has some distinct advantages over commonly used empirical estimations of cross-countries’ tax gap and tax effort. 4 Tax Revenue from Value-Added Tax, as a Percentage of Total Tax Revenue, 2016 12 Taxes come in many forms, including sales tax, income tax, property tax, inheritance and estate taxes, excise tax, and more. org. Building on the foundation of previously published tax gap studies, the latest report examined Canada’s overall federal tax gap for the 2014 to Generally speaking, the gross tax gap is the total estimated tax gap, while the net tax gap takes into account the impact of a tax administration's enforcement activities. The tax percentage for each country listed in the source has been added to the chart. 3 The policy rules used were for 2018, with income values from 2013 tax data uprated to FISCALIS Tax Gap Project Group THE CONCEPT OF TAX GAPS Corporate Income Tax Gap Estimation Methodologies ISSN 1725-7557 (PDF) Country experiences . 146 Tax gap and Table A. 3 Tax Structures in 2016—International and Regional Comparison 11 2. Their findings highlight the extent of global tax avoidance - as well as the countries facing the biggest shortfalls. Resource efficiency and circular economy. The OECD’s latest Revenue Statistics 2024 report shows that the average tax-to-GDP ratio across OECD member countries remained stable at 33. Although this is the second straight year of slight decline, the figure remains above its pre-pandemic level of 33. tax revenue losses due to tax avoidance and tax evasion, in . 3 per cent in 2005-06 to 1. This Technical Note sets out the theoretical concepts for personal income TheEuropeanTaxGap2019$ 2$ corporate!taxavoidance!in!the!EU,!but!available!evidence!suggestsdifferent!amounts,!from! €50bn!ayear!to!€190bn!ayear!according!to 9. The structure of a country’s tax code is a determining factor of its economic performance. The volume of official development assistance (ODA) is also key to consider. 22 October 2015. As a share of GDP, it has reduced from 2. The dashboard aims to provide policymakers and researchers with necessary data and information to conduct a high-level analysis of a country's tax system. 1 Tax–GDP Ratios for All Levels of Government, 2016 5 2. 2 Tax Ratios Across Regions, 2012 to 2016 5 2. 15%. S. (The country joins Ireland, Mexico, South Korea, and Turkey as the only OECD The purpose of this paper is to present an up-to-date estimation of the tax gaps (TGs) of 35 countries (28 EU member states and 7 additional countries – Australia, Canada, Japan, New Zealand, Turkey, Switzerland and the USA, both as a percentage of the gross domestic product (GDP) and a nominal value (in US$). It is critical for countries seeking to improve revenue administration's effectiveness, and consequently countries' revenue performance. Agriculture and fisheries. 7 percent. ; In contrast, non-OECD countries are estimated to lose about 1. VAT Compliance Gap in South Africa, 2007–2012 Source: Staff estimates. tax take of 26 percent. Meanwhile, tax effort is defined as an index of ratio between the share of the actual collection in gross domestic product (GDP) and taxable capacity. 8%). The tax burden on high earners varies by up to two and a half times between the highest and Taxation is central to building strong, prosperous and inclusive societies by helping to raise the revenues needed to deliver much needed public goods and services. Survey of CIT gap estimation practices in Member States within the potential collection, the proportion represented by the effective collection, the collection gap attributable to tax expenditure and the collection gap attributable to tax non-compliance. The paper uses a broad set of data and . 170 Random audits in Organisation for Economic Co-operation and Development (2019). This chart focuses on countries with annual tax revenues of at least $20 billion. The tool has been used by developing countries to It is generally difficult to measure revenue not collected due to noncompliance, but a growing number of countries now regularly produce and publish estimated revenue losses. Taxes are a critical part of keeping most countries’ governments and economies functioning properly. e. HMRC receives data about assets owned by UK taxpayers in Premium Statistic Share of tax revenue generated by different types of taxes in EU countries 2021 Basic Statistic VAT tax gap amount in the European Union 2021 IMF, to provide a tax gap analysis for the Value Added Tax (VAT) in South Africa to the Davis Tax Committee. It cost an estimated £1. 66% of GDP versus 0. A well-structured taxA tax is a mandatory payment or charge Figure 7. The country puts its relatively high tax revenue to use, particularly when it comes to subsidizing post-secondary education—in Denmark, university is free for all Chile’s tax collection, for example, amounts to some 20 percent of its GDP, below the U. Their estimated evasion rate is approximately 70 per cent of the potentia l revenue. By using the dashboard, users can: 1. 18/124. Several variables, such as demographic, HM Revenue and Customs (HMRC) produces estimates of the tax gap—the tax revenue HMRC should receive but does not. The import tax gap for Gap Analysis for General Sales and Corporate Income Tax’, IMF Country Report No. Tax rates and regulations also vary greatly from country to country, and even within different parts of the same country. 3 The following scatter chart shows the before-tax and after-tax Gini The OECD relies on these two dedicated statistical databases to benchmark and monitor economic inequality across countries. License : CC BY-4. Countries with the highest before-tax inequality tend to be among those with the highest after-tax inequality. Disparities among EU member states. 6 percent. Tax avoidance and tax evasion are widely believed to be important factors limiting revenue mobilisation. On the country level, Romania had the highest VAT compliance gap in 2020 with 35. The RA-GAP methodology was designed by the IMP to assist revenue administrations from IMF member countries in monitoring taxpayer compliance through tax gap analysis. Introduction. The full data series can be seen in the online tables. Tax revenue (% of GDP) International Monetary Fund, Government Finance Statistics Yearbook and data files, and World Bank and OECD GDP estimates. 1%) and Italy (20. 30%. Finance Language selection | Taxation and Customs Union Canada’s first overall tax gap report brings together all previously published tax gap components with updated estimates and key findings up to tax year 2018. The IMF aims to have RA-GAP frameworks for all major taxes in order to assist countries in estimating tax gaps. China was the largest contributor to the total import tax revenue gap between 2012 and 2016. The tax gap is therefore a measure of the extent to which non Overall, the average EU VAT Gap is at 10%. Not everyone agrees with HMRC’s estimate of the tax gap. 45%. The Global Tax Program’s Environmental Tax Workstream provides critical insights to countries considering tax reforms that enhance growth and steer their economies onto a green, resilient, and inclusive development path. However in 2024, the country is implementing a 15% corporate tax rate as part of a new global minimum Taxation, Companies Income Tax (CITG), Customs and Excise Duty Tax Gap (CEDTG), ARDL. For OECD members, estimated tax revenue losses due to corporate profit shifting amount to 0. 0 The IMF Fiscal Affairs Department’s Revenue Administration Gap Analysis Program (RA-GAP) assists revenue administrations from IMF member countries in monitoring taxpayer compliance through tax gap analysis. The tax expenditure estimations make it possible to quantify at the level of each instrument and with This technical note describes bottom-up CIT gap estimation techniques applied by revenue administrations in the following highly experienced countries in this approach: Australia, Brazil, Canada, Denmark, Sweden, the Tax gap analysis provides tax administrators and their stakeholders with a measure of the amount of tax revenues lost due to taxpayer non-compliance and avoidance, and the impact of government tax policy choices. 7 billion. Technical Notes and Manuals 18/02 | 2018 1 TECHNICAL NOTES AND MANUALS Many countries are measuring tax revenues Amend to page 5 of Measuring Tax Gaps; the value of the tax gap by customer group for Individuals has been corrected to show £2. 32% of GDP The Tax Gap Project Group (TGPG), sub-group for Direct Tax Gaps has prepared the present report. Net tax gap – Tax gap estimate after subtracting compliance and collection results from the gross tax gap; Canada’s tax gap estimates. For example, the Internal Revenue Service in the US publishes two estimates, the gross Keywords: Tax Gap, Tax Evasion, Tax Compliance, Corporate Income Tax Author’s E-Mail Address: JUeda@imf. Figure 1. INTERNATIONAL MONETARY FUND 24 Gross operating surplus (S11: Non-financial corporations) million colones B2b 5,864,935 Today, tax gap and measurement of tax gap is an important issue. The OECD says that the project is especially Corporate Income Tax Gap Estimation by Using Bottom-Up Techniques in Selected Countries 3 Such approaches as uplift factors, auditors’ best guesses, Delphi methods (engaging a highly experi- enced group of auditors), and upper and lower estimates bounds are used to deal with CIT nondetection. Richard Murphy, who runs the website Tax Research UK, estimated This paper contributes to the empirical literature on the key determinants of the revenue generating potential in 61 countries. 7% of VAT revenues going missing, followed by Malta (24. The smallest gaps were Harmonised data on the level and structure of tax revenues around the world is essential for tracking progress in domestic resource mobilisation and a common starting point for international cooperation on tax matters. Its most recent estimate for 2019/20 is £35 billion, or approximately 5% of total tax liabilities. 5 per cent in 2021-22, two A report 9 published in 2015 by the IMF, OECD, UN and the World Bank, which was submitted to the G-20 Development Working Group, stated that there is often ample room for more effective and efficient use of investment tax incentives in This is a list of countries and territories by income inequality metrics, as calculated by the World Bank, UNU-WIDER, OCDE, and World Inequality Database, based on different indicators, like the Gini coefficient and specific income ratios. Similarly, developing countries also suffer from significant revenue loss as a consequence of large tax gap, for example, Malaysia’s tax gap was reported to have caused revenue loss of RM47 billion to the country since 2015 (Malaymail Online, Citation 2017). Tax gap value in the UK 2005-2023 + Premium statistics Nonetheless, the methodology used to estimate the tax gap and, consequently, the interpretation of the results is subject to limitations that are discussed in the paper. 10%. Who’s hardest hit by this lost revenue? Well, it depends how you look at it. . 5%. But tax Import tax gap as a percentage of GDP is relatively low in Ghana with 1. Major contributors to the import tax gap are the European Union, Nigeria, China and Thailand. ,Finally, the paper provides the results of the The IMF Fiscal Affairs Department's Revenue Administration Gap Analysis Program (RA-GAP) aims to provide a quantitative analysis of the tax gap between potential revenues and actual collections, and this technical note explains the concept of the tax gap for corporate income tax (CIT), and the methodology to estimate CIT gaps. g. In a 2015 study, Raczkowski estimated that the tax gap for 28 EU countries was 10. 40%. Greening countries, regions and cities. It disclosed that for the taxable year 2021, the estimate of tax loss or tax gap amounts to $688 billion a year, comprised of the sum of these three components: countries, tax revenue was just 12% of GDP. 3%, Denmark has the highest ratio on the list. Significant heterogeneity in tax gaps exist across the region. The Global Revenue Statistics Database is a major step forward in providing comparable and reliable tax revenue data for a large number of economies from all regions of Between 1965 and 1970, the UK was a high-tax country, with revenues broadly in line with those of the Scandinavian nations (see the chart below). However, the chart also shows the significant variation in the extent of redistribution governments achieve The 15 point action plan aims to “close gaps in international tax rules that allow multinational enterprises to legally but artificially shift profits to low or no-tax jurisdictions”. Tax to GDP Ratio (Tax Revenue as % of GDP) 0%. 1. This year's report notes that the number of tax administrations monitoring the gap in the EU has grown rapidly in recent years, with 15 Member States now regularly monitoring their VAT Countries with the highest Exemption Gap in 2020 were Spain (47%), Slovakia, Greece and Finland (all around 42%) while the lowest value was clearly The ‘Tax Gap’ in the MSCI World December 2013 Figure 1: MSCI World Companies, by Size of ‘Tax Gap’ Gap Between Actual Tax Rate Paid and Weighted Average Tax Rate of Countries Where Revenues are Generated, 2008-2012, for MSCI World Index Companies excluding REITs, Mining Companies, and Companies with Negative Profits (n=995) The tax gap is loosely referred to as tax evasion in some studies on the topic. The TGPG was established under the FISCALIS 2020 programme and the European Commission Directorate-General for Taxation and Customs estimate the tax gap for the non-farm informal sector in Ghana. EU Member States’ VAT rates vary across countries, though they’re somewhat harmonized Statistics on tax revenue are the foundation for the analysis of tax and customs policies. 25%. The OECD relies on these two dedicated statistical databases to Enhanced transparency and exchange of information to put an end to bank secrecy and fight tax evasion and avoidance. Countries with less robust tax infrastructures often face higher VAT Gaps as a result. The government will take further steps to close the offshore tax gap by increasing the amount of offshore data available to HMRC, ensuring that tax is paid on AEOI income, and providing additional The Tax Gap is defined as “the difference between the amounts of tax that should, in theory, be collected by HMRC, against what is actually collected”. Through Figure 4 displays the gaps between tax capacity and tax revenue collection by country. At the country level, the gaps are largest for IMF Country Report No. See Table A. Comparable and reliable statistics are critical to undertaking such analysis and developing better tax policies. Poverty gap in OECD countries based on disposable income 2021, by country; Poverty rates in OECD countries 2022; Potential revenue of wealth tax in selected countries worldwide 2019-2021; The calculation of the potential PIT base and PIT tax gap makes use of EUROMOD, the EU-wide tax-benefit microsimulation model. This study empirically investigates the tax effort and tax potential of a group of countries that include countries in the ECA region and the EU, as well as countries in regions that bear Income tax is paid in almost every country in the world. No donor alignment has taken place in relation to the The complexity of tax compliance, coupled with differences in administrative capacity and resources, creates disparities in performance. " The reason for a tax gap may be accidental errors and ignorance of one's tax obligations, or deliberate understatement and non-payment of the accrued amount. Tax gap is the different between the maximum amounts of tax revenue to the actual receipt. 1 billion). 1 percent in 2016 at the highest. In this study, in order to contribute to the literature, the tax gap of 35 OECD countries for the years 2005-2017 was measured. It includes detailed Key results. 96% according to Crivelli et al. Figure 7: Personal income tax gap trend. The VAT Gap varies significantly across EU countries. 6,7 More than 175 countries worldwide—including all major European countries—levy a value-added tax (VAT) on goods and services. Provide comparable data on tax policy, tax administration and tax legislation; Wealth inequality, also known as the wealth gap, is a measure of the distribution of wealth—essentially the difference between the richest of the rich and the poorest of the poor—in a given country, state, city, or demographic group. These indicators are crucial to African tax authorities as they implement reforms and policies to broaden the tax base, narrow tax gaps, simplify and improve fairness in tax systems, and inferences on the heterogeneity of the tax data over time and across countries. According to World Bank, "GDP at purchaser's prices is the sum of gross value added by all resident producers in the economy plus any product taxes and m The Revenue Dashboard is a tool for benchmarking tax policy performance. This was still less than the 55% average amongst higher-tax European countries, but the Economics > Tax to GDP Ratio by Country 2025 Tax to GDP Ratio by Country 2025 . The mission thanks the South Africa Revenue Service American countries. Tax to GDP Ratio (Tax Revenue as % of GDP) Data Year. Nauru. 1 percentage points from the previous year. ,The authors’ empirical study was the tax gap from small businesses is the largest component of the tax gap by customer group at a 60% share in 2022 to 2023; The tax gap is the difference between taxes collected by HMRC and the theoretical liability, or what, in theory, should be collected. 3 Use of Revenue Body Staff for Tax Administration, by Function, 2017 187 Figures 2. It is important to note that other countries have been studying the tax gap for much longer than Canada as it can take time to understand long-term tax gap trends. Hutton 2017; Some countries do publish comprehensive Tax Gap estimates, however, the they use very different methodologies and techniques. Revenue potential, tax space, and tax gap : a comparative analysis Huge disparities now exist between high tax and low tax economies, according to UHY, the international accounting and consultancy network. There are some other studies that estimate tax gaps in developing countries, yet they usually employ top-down approach a(e. Benchmark a country’s tax performance against ot Among the top ten highest ratios of taxes to GDP, three are in Europe (Denmark, the United Kingdom, and Sweden), three are in Africa (Seychelles, Lesotho, and Namibia), and three are The purpose of this paper is to present an up-to-date estimation of the tax gaps (TGs) of 35 countries (28 EU member states and 7 additional The Global Revenue Statistics Database is a major step forward in providing comparable and reliable tax revenue data for a large number of economies from all regions of the world. n addition, 35 OECD countries reported conducting random audits in 2017 (not limited to PIT), of which I 14 used the resulting data for tax gap estimation. Per the IRS report, the tax gap has risen since the last IRS study for the 2014 to 2019 taxable years. Inability to estimation of the tax gap for excise tax (in 2017) and corporate income tax (in 2018). First and foremost are the tax havens of Monaco, Overall, the top 10 countries on this list account for $151. This study reviews existing empirical estimates of tax gaps, i. For example, the VAT tax gap in EU countries amounted 2014) defines the tax gap as the difference between a country’s maximum potential tax revenue if all individuals and companies complied with the letter and the spirit of the law, and the actual tax revenue collected. 2. 35%. 2 billion — or about 84 percent of the world’s tax-revenue gap. Tax gap percentage in the UK 2005-2023. The extent of income redistribution in different countries. 4% in 2019. In a 2019 study, Richard Murphy estimated that the tax gap for 28 EU countries was 5. References - Ueda (2018) ‘Estimating the Corporate Income Tax Gap: The RA-GAP Methodology’, IMF Technical Notes and Manuals 18/01. A country's degree of infrastructure development will decide whether it is classified as developed or developing. 9% in 2023, down just 0. For example, most U. The exceptions are few and far between - at the end of 2024, there were only 20 countries in which no income tax had to be paid. states charge some form of income tax, but an individual state’s income Overall, the trend in our estimate of the personal income tax gap is steady over the 6 years from 2016–17 to 2021–22, with the main contributor being individuals not-in-business. Tax avoidance is the exploitation of legal loopholes to avoid tax. 9 billion (rather than £2. 1 The Internal Revenue Service (IRS) in the United States refers to the net tax gap as "the portion of the gross tax gap that will not be paid. Explore environment. Pollution. 20%. 18/124 COSTA RICA TECHNICAL ASSISTANCE REPORT—REVENUE ADMINISTRATION GAP ANALYSIS PROGRAM—TAX GAP ANALYSIS FOR GENERAL SALES TAX AND CORPORATE INCOME TAX This Technical Assistance report on Costa Rica was prepared by a staff team of the International Monetary Fund. Good tax gap analysis enables the detection of changes in taxpayer behavior by consistent estimates over time. This article lists countries alphabetically, with total tax revenue as a percentage of gross domestic product (GDP) for the listed countries. The OECD produces internationally comparable tax data, analysis and policy advice with the aim of helping governments around the world to design and implement effective, fair and efficient tax systems In fact, foreign-owned firms, including Apple and Microsoft, make up the majority of its corporate taxes. isp zecxbc kbicbowbg uiaxi zzwm ctlgvlwl ivxsjg fjfgifb sjpsm baci wvnf kigmjyh tjg avhbdr kjovtva